REVENUE MEMORANDUM CIRCULAR NO. 14-2026 issued on March 4, 2026 clarifies Revenue Memorandum Circular (RMC) No. 8-2026 on the lifting of the suspension of tax audit and field operations, Revenue Memorandum Order (RMO) No. 1-2026, and RMO No. 6-2026 on the implementation of revised audit policies, procedures, and safeguards.

Under Section IV(A)(c) and Section V(D) of RMO No. 1-2026, a Replacement Electronic Letter of Authority (eLA) issued solely to maintain continuity of audit authority – those arising from reassignment of Revenue Officers or organizational restructuring – is an administrative adjustment and shall not be construed as an issuance of a new audit authority.

Jurisprudence supports both the validity and necessity of issuing a new or amended Letter of Authority (LOA) when there is a reassignment, substitution, or transfer of a Revenue Officer. In Commissioner of Internal Revenue v. McDonald’s Philippines Realty Corp. (G.R. No. 242670, May 10, 2021), the Supreme Court ruled that a substitute or replacement Revenue Officer may validly continue an audit or investigation only upon the issuance of a Replacement LOA.

Further, where the original LOA/eLA was validly issued and the taxpayer, taxable period, and scope remain unchanged, the Replacement eLA merely preserves and continues the existing audit authority. It does not trigger the system-assisted selection and centralized approval requirements applicable only to new audit initiation under Section VI of RMO No. 1-2026.

All LOAs/eLAs issued prior to the effectivity of RMO No. 1-2026 remain valid and enforceable, provided that they were issued in accordance with the laws, rules, and regulations existing at the time of issuance. The Single-Instance Audit Framework is prospective and does not invalidate prior audit authorities. However, previously issued LOAs/eLAs may be replaced where warranted under RMO No. 1-2026. In these instances, the Replacement eLA does not create a new audit authority; it reflects consolidation or transition due to reassignment, substitution, or transfer of a Revenue Officer consistent with RMO No. 1-2026.

LOAs/eLAs, Mission Orders (Mos), and Tax Verification Notices (TVNs) issued prior to the effectivity of RMO No. 1-2026 that are not subject to replacement under said RMO are not required to bear the mandatory labels. Such instruments remain valid and enforceable and shall continue to be implemented. The mandatory labeling is intended to emphasize the scope of authority of an audit instrument and not to define the scope of authority. However, any subsequent audit actions undertaken after the effectivity of RMO No. 1-2026 must comply with the applicable policies, safeguards, and procedural reforms under the revised framework, including observance of due process requirements.

A TVN is limited to the specific transaction or claim stated therein. Its scope cannot be expanded beyond what is expressly stated in the notice. If the findings from the verification suggest possible broader tax issues that warrant full audit, the Revenue Officer must secure a separate eLA before any further audit activity is conducted.

A Replacement eLA issued for purposes of continuity, consolidation, or administrative realignment due to reassignment, substitution, or transfer of a Revenue Officer under RMO No. 1-2026 is strictly limited to the same taxpayer and the same taxable period(s) covered by the subsisting LOA(s)/eLA(s).

If additional taxable period(s) are to be examined, such coverage must undergo the system-assisted taxpayer selection and centralized approval process under Section VI of RMO No. 1-2026. Absent compliance with that process, any purported expansion is outside the permissible scope of a Replacement of eLA.

The filing or receipt of any communication assailing the validity of the Replacement eLA shall not suspend, interrupt, or delay audit and investigation procedures, nor divest duly authorized Revenue Officers of their authority to examine the taxpayer’s books and records. The audit and assessment process shall proceed in accordance with existing laws, rules, and regulations.

Further, the National and Regional Offices shall not entertain communications questioning the validity of duly issued Replacement eLAs issued solely to maintain continuity of audit authority pursuant to RMO No. 1-2026, for as long as:

a. the original LOA(s)/eLA(s) were validly issued;
b. the taxpayer, taxable period(s), and authorized scope remain unchanged; and
c. there is no expansion of taxable period coverage or scope beyond that authorized under the original LOA(s)/eLA(s).

If a taxpayer has two existing eLAs issued by different BIR offices but covering the same taxable period, these eLAs shall be subject to automatic consolidation into a single replacement eLA pursuant to RMO No. 1-2026, since multiple eLAs covering the same taxpayer and taxable period are generally not allowed. However, if the taxpayer files a timely Request for Non-Consolidation of VAT cases on or before March 13, 2026, the affected eLAs may proceed separately but only until May 15, 2026. Thereafter, or beginning May 18, 2026, all pending eLAs shall be consolidated and may no longer continue independently. 

During the transition to the Single-Instance Audit Framework under RMO No. 1-2026, tax liabilities that have been assessed and already paid prior to the issuance of a Replacement eLA shall be recognized as settled for the specific taxable period and tax type covered by such assessment. Such liabilities shall be treated as closed for purposes of the transition and shall not be re-assessed under the Replacement eLA, absent any legal ground under existing laws and regulations. Accordingly, the Replacement eLA shall proceed only with respect to the remaining unsettled tax types or issues for the same taxable period.

The audit selection criteria are subject to periodic review. The Commissioner of Internal Revenue has the authority to add, modify, or replace audit selection criteria to align with the Bureau of Internal Revenue’s evolving revenue goals and compliance strategies. Any such modifications shall be implemented strictly through the system-assisted selection process, ensuring that all subsequent eLAs are generated based on the most current and approved risk criteria.

Verified information or complaints may serve as a basis for an audit, but it must be processed strictly in accordance with Revenue Regulations No. 16-2010. Unlike generic third-party data, a verified complaint from an informer constitutes “Confidential Information” which requires a specific legal evaluation. It must be endorsed for preliminary investigation to determine prima facie findings of fraud, rather than being subjected to standard system-assisted audit selection criteria.

The following are important dates to remember for purposes of consolidation of pending audits:

a. March 13, 2026 – Deadline for taxpayers to file a written request for nonconsolidation of VAT audit cases.
b. March 20, 2026 – Automatic consolidation of pending LOA/eLA covering the same taxpayer and taxable period, where multiple LOAs/eLAs exist, except where a timely request for non-consolidation has been duly filed.
c. May 15, 2026 – Deadline for VAT Audit Section (VATAS) and Large Taxpayers VAT Unit (LTVAU) to review, organize, and prepare all ongoing audits and assessments for transfer to the appropriate regular offices of the BIR, in accordance with RMO No. 1-2026.
d. May 18, 2026 – All pending LOAs/eLAs covering the same taxpayer and taxable period, where multiple LOAs/eLAs exist and which were previously allowed to proceed separately, shall be automatically consolidated. Where only one LOA/eLA exists, no consolidation shall take place; however, such cases shall be transferred to the appropriate regular offices pursuant to RMO No. 1-2026.

Consolidation applies only when there are multiple pending LOAs/eLAs covering the same taxpayer and same taxable period. Where only one LOA/eLA exists, no consolidation action is required. In such case, the taxpayer is not required to file a Request for Non-Consolidation.

Where a timely request for non-consolidation has been filed and received, the affected LOAs/eLAs may proceed separately until May 15, 2026. Thereafter, or beginning May 18, 2026, all pending LOAs/eLAs shall be consolidated in accordance with RMO No. 1-2026 and its supplemental rules.

Audit findings developed prior to consolidation but not yet assessed shall continue to be evaluated, completed, and acted upon under the Replacement eLA. Reissuance of prior notices shall be required, unless the audit findings are materially changed in a manner that affects the factual or legal basis of the assessment, in which case the applicable due process requirements under existing issuances shall be observed.

The Replacement eLA must be properly issued and served upon the taxpayer in accordance with existing rules and procedures on service.

If a taxpayer has executed a Waiver of the Defense of Prescription under LOA/eLA that is subsequently replaced, the execution of a new waiver is not required. The existing waiver remains valid and binding. All acts performed and records generated under the replaced LOA/eLA preserve their legal effect and are deemed part of the continuing audit process. The Replacement eLA is merely issued “for the continuation of audit”. Consequently, the replacement does not interrupt the audit timeline, and the original waiver continues to toll the statute of limitations without the need for a new execution.

The issuance of a Replacement eLA does not invalidate prior audit actions. As the new eLA is issued specifically “for the continuation of audit”, all subpoenas and document requests issued under the subsumed LOA/eLA are deemed continued by the Replacement eLA. The taxpayer is still legally obligated to comply with these outstanding requests, and all docket. records previously submitted shall form part of the consolidated official audit docket.

Requests for Non-Consolidation of VAT Cases filed beyond the prescribed deadline shall not be allowed, and automatic consolidation shall proceed in accordance with RMO No. 1-2026 and its supplemental rules.

Pending audit and assessment cases may continue to be processed by VATAS and LTVAU up to May 15, 2026, subject to the consolidation framework and safeguards under RMO No. 1-2026. Thereafter, VATAS and LTVAU shall no longer undertake audit functions, except for VAT refunds, and shall proceed with the winding-up of operations until May 29, 2026. Where automatic consolidation applies – that is, where multiple eLAs
covering the same taxpayer and taxable period exist – the affected eLAs shall be governed by the consolidation rules and shall no longer proceed independently.

Upon dissolution of VAT Audit offices and task forces, all case dockets, evidence, working papers, and issued-but-unserved processes must be inventoried and formally turned over to the receiving office or the appropriate regular/investigative office with an acknowledged transmittal.